The axes of the new public energy services policy

The national government, through the Ministry of Mines and Energy, has published for comment the draft decree containing the new policy guidelines for the residential public electricity supply in Colombia.

Comments and comments on the design, which indicates that it aims to make efficient use of the various energy sources, and to the benefit of the user in terms of quality, timeliness and cost of the service, can be received until April 19, 2023.

The project proposes that the participation of user associations, control members, user leagues, value groups and citizens in general will be promoted in the processes of regulation and public policy formulation in the sector.

These are the axes of the new proposed policy:

A Lender of Last Resort (LUP) scheme

It is established that the Energy and Gas Regulation Commission (Creg) regulates the Last Instance Provider (PUI) scheme that it will apply to ensure the provision of energy services under various conditions for users in special areas and situations of withdrawal from the marketing market agents .

The PIU is an agent that undertakes the commercialization of electrical energy to the attention of a user who has no supplier, or when the supplier chosen by the user cannot continue to provide the service for reasons set out in the regulation.

Share in the wholesale market

It is proposed that the Creg design the necessary mechanisms so that users and demand aggregators can voluntarily offer reductions or disconnections of demand in the wholesale energy market with the aim of giving reliability to the national interconnected system, supporting fixed energy obligations, prices in the energy market and the cost of restrictions.

The compensation of the agents who reduce or cut off their demand should be made in accordance with the criteria of economic efficiency.

Compensation for excess energy

The Commission will also be in charge of determining the compensation mechanism for small-scale self-generated surpluses and will be responsible for its liquidation and measurement.

This mechanism should facilitate the periodic liquidation of energy surpluses and define the conditions for rapid repayment of monetary balances in favor of the self-producer, taking into account the technical characteristics of the measure and the installed capacity of the user.

Generation schemes with photovoltaic solar energy systems with or without storage systems installed in special areas, aimed at reducing losses, will be considered as Small-Scale Self-Generator (AGPE), with regard to the liquidation of excess energy. , the surplus of which will be deducted from the billing of the special area.

In these cases, the installed power can exceed 5MW, as long as there is capacity to connect to the circuit in question and the AGPE is represented by the incumbent marketer.

Metering for residential, industrial and commercial users

The Creg analyzes the feasibility and ease of easing the consumption metering requirements of residential, industrial and commercial users.

Under the flexibility measures developing advanced metering infrastructure plans, residential users who implement them will be exempted from charging for reactive energy, regardless of their level of active energy consumption.

Non-residential consumers connected to voltage level 1 that have an advanced metering infrastructure and that register the reactive energy consumption are also not charged for this energy, as long as they do not exceed fifty percent (50%) of the active energy consumption in the same period.

Energy purchases for the regulated market

The project establishes that a regulation of the framework applicable to energy purchases destined for the regulated market will be defined so that all users benefit from the competition in the wholesale energy market and reduce their exposure to fluctuating prices in the stock market.

This includes promoting the participation of generation agents who have fixed power without a contractual contract in public calls for energy purchases and generation agents who are vertically integrated with the commercialization activity and whose nationally regulated demand serves more than 5%, in public calls of other traders.

Efforts will be made to ensure that the integrated and non-integrated agents maintain the same conditions for participation in the calls.

Rules will be established so that the offer prices in these calls meet the criterion of economic efficiency and take into account the historical behavior of the prices of the contracts signed and settled for the regulated market.

It is temporarily being considered that agents who have more than 10% of their regulated demand exposed to the energy market must open a public call for energy purchases with the new rules.

thermal generation

The project indicates that, taking into account the participation of thermal sources in price formation on the wholesale energy market, the aim should be to ensure the correct allocation and use of these sources and the use of fuel, in order to guarantee the service to the minor economic costs.

For this purpose, the Creg will adjust the existing regulation, including the prioritization in the use of fuel contracts according to the cost sequence for the variable costs of the price offers on the stock exchange.

Start-up and shutdown costs are recognized when they are actually incurred during actual operation. Consequently, these costs are not included in the calculation of the stock price of the ideal office.

Hydraulic generation

For the transmission of energy generated from hydraulic sources, the minimum cost valuation of the generation bids is taken into account when they correspond to compliance with the minimum environmental or phytosanitary flows that the installation must comply with.

Other aspects covered are the economic valuation of discharges that are not supported by environmental or technical regulations; This valuation should be compensated for national demand and the minimal cost valuation of the generation backed by water resources.

Similarly, the variable costs of the price offers on the exchange should take into account the control capacity, the reservoir level according to the long-term and medium-term planning, hydrological contributions and other climatic variables from official sources and the statement of availability for units that do not meet the minimum control capacity of the reservoir .

Monitoring market power in price offers on the exchange

As part of the operating rules of the Wholesale Market for Energy, technical procedures must be implemented to detect in real time the possible exercise of a dominant position by agents in the energy offers on the stock exchange they submit to the National Reporting Point, CND and its impact decrease in the share price.

The transaction costs of wholesale market hedges will decrease

The Creg will review and adjust the applicable regulatory system of guarantees and supply limitation in order to optimize the required coverage for transactions on the Wholesale Market for Energy.

The aim is to reduce the cost of guarantees for the transactions, without generating portfolio or systemic risks.

In addition, it is proposed to include existing mechanisms in the financial markets to guarantee transactions in the energy market and to make the amounts to be guaranteed and their periodicity more flexible in case of variations in the settlement of market transactions.

Source: El heraldo